War -- the Ultimate Racket

Major General Smedley D. Butler (1881-1940) was one of the most decorated military officers in American history. Butler was twice awarded the Medal of Honor and also received the Marine Corps Brevet Medal when the Medal of Honor was not given to officers.

General Butler knew war, and in a series of interviews, speeches, and a 1935 book entitled War Is A Racket, he examined the relation between U.S. military intervention and corporate power. "I spent 33 years in the Marines" he said in 1931. "Most of my time being a high priced muscle man for Wall Street, and bankers. In short, I was a racketeer for capitalism. I helped purify Nicaragua for international banking ... I helped make Mexico, especially Tampico, safe for American oil interests in 1914 ... I helped in the rape of half a dozen Central American republics for the benefit of Wall Street."

In 1931, Butler told the New York Times: "I had a swell racket. I was awarded with honors, medals, promotions. I might have given Al Capone a few hints. The best he could do was operate a racket in three city districts. The Marines operated on three continents." In a 1933 speech he commented on the military/government/corporate racketeering division of labor: "It has its finger men, its ‘brain men’ to plan war preparation, and a Big Boss, Super-Nationalistic-Capitalism."

Although he suspected he was part of a racket, Butler’s realization of his involvement did not become clear until retirement. "Like all members of the military profession" he noted, "my mental faculties remained in suspended animation while I obeyed the orders of higher up."

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In a chapter entitled "Who Makes the Profits?," the outspoken Marine offers numerous examples of war profiteering on the part of corporate America, a group he scorned not only for its boundless greed, but for its abysmal combat record. "How many of these war millionaires shouldered a rifle? ... How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? ... How many of them were wounded or killed in battle?"

With the rise of mulitnational corporations, Butler’s analysis is particularly relevant as profiteering is now measured in billions as opposed to millions of dollars. Consider the fortunes to me made in the reconstruction of Iraq (while much of the Gulf Coast languishes in post Katrina squalor). Antonia Juhasz, of the Foreign Policy in Focus think tank, notes that some 150 companies have been awarded contracts totaling over $50 billion, more than twice the GNP of Iraq. Haliburton (surprise) leads the pack with an $11 billion deal while 13 other U.S. corporations will earn more than $1.5 billion each.

Juhasz argues a strategy has been enacted that will deliver much of Iraq’s post war economy to foreign investors. Between May 26th and June 28th 2004, L. Paul Bremmer, former chief administrator for the U.S. led occupation government, enacted his 100 Orders of Iraq covering all major aspects of life in that country. Order No. 39 allows for privatization of Iraq’s 200 state-owned businesses, a provision disallowing local (Iraqi) preference over foreign companies. Corporations such as Haliburton and Bechtel can buy Iraqi businesses, staff them with American employees, and return profits to the United States. Order No. 40 permits foreign banks to purchase up to 50 percent of Iraqi banks while Order No. 49 reduced the tax on corporations - a significant number of which will be foreign owned from a high of 40 percent to a flat 15 percent.

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The real prize in Iraq is oil. Former Republican strategist Kevin Phillips, author of American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowing in the 21st Century, stated that the Iraq War is being fought "principally over oil.’ According to Phillips, as the U.S. will likely have to exist politically volatile Saudi Arabia in the foreseeable future, the Bush Administration decided that the best way to develop an alternative oil supply "was to aim at Iraq."

Phillips blood for oil pronouncement should hardly be surprising. In 1988, Chevron CEO Kenneth Derr stated: "Iraq possesses huge reserves of oil and gas - reserves I’d love to get my hands on." On the eve of the Gulf War in 1990, President George H. Bush noted that "Our jobs, our way of life, our own freedom and the freedom of friendly countries around the world would all suffer if control of the world’s great reserves oil fell into the hands of Saddam Hussiein."

On December 22nd, 2004, Iraqi Foreign Minister Abdel Mahdi addressed reporters and oil industry leaders in Washington D.C. Mahdi stated that Iraq wanted to issue a new law opening his country’s national oil company to private foreign investment. "So I think this is very promising to the American investors and to American enterprise, especially oil companies," he said.

In 2004, the U.S. led the world in defense spending accounting for 47 percent of global military expenditures followed by Japan with 5 percent and Britain, France, China with 4 percent each. A significant portion of this money is pumped into the world’s 100

largest military hardware producing corporations (excluding Chinese companies), 38 of which are based in the U.S. These recipients of "corporate wealthfare" accounted for almost two-thirds for arms sales by the top 100 companies. According to Kari Schake, Bradley Professor of International Studies at West Point, our "behemoth defense budget" is replete with programs and practices made obsolete by technology that inadequately address "the top national security threats."

For Butler, the only way to end the war-as-a-racket travesty is via concerted citizen action at the national level. On the final page of his book, the highly decorated Marine stated: "Let’s pass all our suggested antiwar legislation, let’s attend all the peace and disarmament conferences; let’s have all the protest meetings we can arrange ... And the mothers, the wives, and the sisters of future canon fodder must lead the way!"

George J. Bryjak taught sociology at the University of San Diego for 24 years before retiring to the Adirondack Park region of New York State with his wife, Diane. His op-ed pieces have appeared in USA Today, the San Diego Union-Tribune, (more...)